Intelligent Finance want to close my current account that's offsetting my mortgage

mnhmnh

Hi,
I've got a letter saying that IF are closing my current account even though offsetting the balance in it was sold as part of my mortgage features. Can they force close it, and what can I do about the financial impact of that offsetting over the next 10 years, should they compensate me? (besides the £500 for inconvenience).
Thanks

eskbanker

Yes, they can do this, and they aren't picking on you, they're shutting down that side of their business for everyone:

https://www.moneysavingexpert.com/news/2023/05/current-account-bank-closing-if-intelligent-finance/
https://forums.moneysavingexpert.com/discussion/6446128/goodbye-intelligent-finance

What financial impact have you calculated, and based on what assumptions?

Keep_pedalling

They are closing all current accounts and no doubt their terms and conditions allow them to do this. You could always shift the money you are holding into a savings account which, if you are still on a low mortgage interest rate, could actually be beneficial if you can get a higher rate of savings than your mortgage interest.   

Olinda99

I suppose the op is making the argument that they were sold an offset mortgage and now it is no longer an offset mortgage

as to whether they are allowed to do this or not the op should refer to the terms and conditions when they took out the mortgage

I should imagine their financial loss could be quite large depending on how long the mortgage has to run ie they will now be paying interest on the balance of the mortgage that would otherwise have been offset by what they had in their current account for day-to-day spending

ask for calculating this financial loss the op should make some assumption about their average current account balance over the year and what mortgage interest rates will be and what the length of the term left on the mortgage is

born_again

OP could port mortgage to another company offering offset mortgage.

mnhmnh

eskbanker said:

Yes, they can do this, and they aren't picking on you, they're shutting down that side of their business 

What financial impact have you calculated, and based on what assumptions?

Hi,
Basically an average of £2000-£4000 balance at base rate plus 1.2% for the next 11 years, as it is a current account the amount varies.
Thanks

eskbanker

mnhmnh said:

eskbanker said:

Yes, they can do this, and they aren't picking on you, they're shutting down that side of their business 

What financial impact have you calculated, and based on what assumptions?

Basically an average of £2000-£4000 balance at base rate plus 1.2% for the next 11 years, as it is a current account the amount varies.

I don't believe they're under any legal or regulatory obligation to cover that, but no harm in asking - you'll probably be expected to mitigate that down to a net figure by accounting for interest you'd earn elsewhere on that money.

[Deleted User]

The problems that you'll have include:

A - It's not a current account mortgage, so they can easily argue they are separate products.

B- Can you still offset using a savings product? 

C- Ultimately, as long as there are no redemption penalties, you can freely move to the dwindling number that still offer Offset including sister bank Scottish Widows. 

_wishful_thinker

The letter I received said I could open a savings account to offset, although I already have one which is offsetting the mortgage. It also stated savings and mortgage accounts are not impacted by the closure of the current account. Obviously that means you have to set aside money as savings (or move it around) rather than using the daily balance of a current account.

mnhmnh

yes I've got a savings account, but it was the loss of the interest on the current which is my issue, it's made a big difference over the mortgage so far, just seems unfair to remove this feature, which was a key part of the mortgage when I took it out. It's not practical to move money in a and out of savings account as a current account would work.

Ley1974

mnhmnh said:

Hi,
I've got a letter saying that IF are closing my current account even though offsetting the balance in it was sold as part of my mortgage features. Can they force close it, and what can I do about the financial impact of that offsetting over the next 10 years, should they compensate me? (besides the £500 for inconvenience).
Thanks

Hello, just wondering if you got anywhere with IF in regards to this. I’m in the same position- made all the better by not actually being informed the account was closing (but that’s a different issue).